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CIRCULAR

Guiding the implementation of the Government's Decree no. 43/2006/ND-CP of april 25, 2006, providing for public non-business units' autonomy and accountability for task performance, organizational apparatus, payroll and finance

Pursuant to the Government's Decree No. 43/2006/ND-CP of April 25, 2006, providing for public non-business units' tasks, organizational apparatus, payroll and finance;

The Ministry of Finance hereby guides a number of articles of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, providing for public non-business units' tasks, organizational apparatus, payroll and finance as follows:

I. Regarding the scope and subjects of regulation defined in Article 1 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Subjects to enjoy financial autonomy and accountability are public non-business units set up under decision of competent state agencies (independent budget-funded units having their own seals and accounts and accounting apparatuses organized under the provisions of the Accounting Law) and engaged in non-business education - training and vocational training; non-business health; social assurance; non-business culture and information (including local radio and television units), non-business physical training and sports, non-business economic and other non-business activities.

For the Radio Voice of Vietnam, Vietnam News Agency and non-business units having specific operation processes; non-business units having attached units, subjects to enjoy financial autonomy and accountability shall be attached non-business units which satisfy the conditions of being independent budget-funded units having their own seals and accounts and accounting apparatuses organized under the provisions of the Accounting Law.

2. Scientific research institutions, scientific research and technology development institutions and scientific and technological service institutions shall practice autonomy and accountability under the provisions of the Government's Decree No. 115/2005/ND-CP of September 5, 2005, providing for the autonomy and accountability mechanism of public scientific and technological organizations, and guiding documents.

3. Non-business units under the Ministry of Defense, the Ministry of Public Security, political organizations and socio-political organizations may apply the provisions of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, and the guidance in this Circular.

II. Regarding classification of non-business units defined in Article 9 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Non-business units shall be classified as follows:

a/ Units having non-business revenues for self-assuring all regular operation expenses (called non-business units self-assuring operation expenses for short).

b/ Units having non-business revenues for self-assuring part of regular operation expenses, with the remainder of regular expenses covered with the state budget (called non-business units partially self-assuring operation expenses for short).

c/ Units having low non-business revenues, units having no revenues and having all regular operation expenses covered with the state budget (called non-business units with all operation expenses covered with the state budget for short).

The classification of non-business units according to the above provisions shall be kept unchanged for 3 years. After 3 years, re-classification shall be made as appropriate.

During the period of stable classification, if a non-business unit sees changes in its functions, tasks and organization, a competent state agency shall consider and re-classify it as appropriate.

2. Way of determination for classification of non-business units:

Level of self-assurance Total non-business revenues

of regular operation = ............................................. x 100%

expenses of a unit (%) Total regular operation expenses

In which:

- Total non-business revenues shall be determined according to the provisions of Point 1.2, Clause 1, Section VIII and Point 1.2, Clause 1, Section IX of this Circular.

- Total regular operation expenses shall be determined according to the provisions of Point 2.1, Clause 2, Section VIII and Point 2.1, Clause 2, Section IX of this Circular.

Total non-business revenues and total regular operation expenses shall be calculated according to revenue and expenditure estimates of the first year of the stabilization period.

On the basis of the level of self-assurance of regular operation expenses, non-business units shall be classified as follows:

a/ Units self-assuring operation expenses, including:

- Non-business units having the level of self-assurance of regular operation expenses, determined according to the above formula, of 100% or higher.

- Non-business units self-assuring operation expenses with non-business revenues and with state budget capital provided by competent state agencies that place goods orders.

b/ Units partially self-assuring operation expenses, which have the level of self-assurance of regular operation expenses, determined according to the above formula, of between over 10% and less than 100%.

c/ Non-business units having all operation expenses covered with the state budget, including:

- Units partially self-assuring operation expenses, which have the level of self-assurance of regular operation expenses, determined according to the above formula, of 10% or less.

- Non-business units having no revenues.

3. For specific non-business units under the Radio Voice of Vietnam, Vietnam News Agency and non-business units having specific operation processes defined in Clause 2, Article 1 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, specific non-business units shall be classified according to the category of their managing non-business units.

III. Regarding mobilization of capital and borrowing of credit capital defined in Article 11 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Non-business units self-assuring operation expenses and non-business units partially self-assuring operation expenses which are engaged in service activities relevant to their functions and tasks assigned by competent authorities may borrow loans of credit institutions and mobilize capital from their cadres and employees for investment in expanding and improving the quality of non-business activities and organizing service activities and shall be responsible for repaying loans according to the provisions of law.

Investment projects funded with credit capital or mobilized capital shall be executed in accordance with the provisions of law, in a public and democratic manner within the units and in conformity with plannings approved by competent authorities, and be reported to their managing agencies for knowledge, monitoring and supervision.

2. Regarding payment of interests on loans and mobilized capital:

a/ Interests on loans of credit institutions shall be paid at the actual interest rates under borrowing contracts;

b/ Interests on capital mobilized from cadres and employees (capital borrowed from cadres and employees) shall be paid at the actual interest rate under borrowing contracts, which however shall not exceed the interest rate used for calculation of reasonable expenses provided for in the Law on Enterprise Income Tax and guiding documents in force.

3. Sources of capital for payment of interests on loans and mobilized capital and payment of loans and mobilized capital for service activities:

a/ Capital for payment of interests on loans and mobilized capital (capital borrowed from cadres and employees) shall be accounted by the units as expenses for service activities funded with such loans and mobilized capital. In case of capital mobilization in the form whereby cadres and employees and their units jointly contribute capital and enjoy profits in proportion to capital contribution shares, interests on mobilized capital shall be paid from the source of profits from such service activities and shall not be accounted as expenses.

b/ Capital for payment of loans and mobilized capital shall comply with current regulations of the State.

4. Units may use assets procured with the non-business activity development funds and with loans and mobilized capital as security for borrowing capital according to the provisions of law; shall not use state budget funds and assets as security for borrowing capital and shall not use them to pay loans and mobilized capital.

IV. Regarding management of state assets defined in Article 12 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Non-business units shall have to manage state assets according to current regulations on management of state assets at public non-business units. The land use management at non-business units shall comply with the provisions of the Land Law and its guiding documents in force.

2. For fixed assets used for service activities, the units shall make depreciation thereof according to the regime applicable to state enterprises under the Finance Minister's Decision No. 206/2003/QD-BTC of December 12, 2003.

For depreciation sums of money and proceeds from the liquidation (less liquidation expenses) of assets created from the state budget source, the units may keep and incorporate them in the non-business activity development fund (for units self-assuring or partially self-assuring operation expenses) for investment in improving material foundations and renewing equipment of the units (for non-business units with low revenues - if any).

Depreciation sums of money and proceeds from the liquidation (less liquidation expenses) of assets created from loans and mobilized capital of the units shall be used for paying such loans and mobilized capital. After full payment of loans and mobilized capital, the remaining amount, if any, shall be added to the non-business activity development fund.

V. Regarding joint-venture and associated activities:

1. Where non-business units self-assuring or partially assuring operation expenses are engaged in joint-venture or associated activities, they shall comply with the provisions of Standard No. 07 - Accounting of investments in associated companies and Standard No. 08 - Financial information on joint-venture capital contributions, promulgated together with the Finance Ministry's Decision No. 234/2003/QD-BTC of December 30, 2003, promulgating and publishing 06 Vietnamese accounting standards.

2. Non-business units may use assets created from the non-business activity development fund, loans and mobilized capital as capital contributions to other units and organizations in the form of joint venture or association according to the provisions of law. The use of land as capital contribution to joint-venture or associated activities shall comply with the provisions of the Land Law and guiding documents in force.

3. The financial results of joint-venture and associated activities of the units, after payment of taxes according to the provisions of law, shall be accounted as results of service activities and managed and used under the provisions of this Circular.

4. Joint-venture and associated activities must be made public and transparent within the units and reported to the managing agencies according to regulations.

VI. Regarding transaction accounts defined in Article 13 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Non-business units shall open accounts at a state treasury for collecting and spending via state treasury state budget amounts according to the provisions of the State Budget Law, including state budget allocations; revenues, expenses and fees belonging to the state budget and other state budget amounts (if any).

2. Non-business units may open bank or state treasury accounts for revenues and expenses related to service activities.

VII. Regarding elaboration of internal spending rules

1. For the proactive use of allocated regular operation funds for proper purposes in a thrifty and efficient manner, non-business units enjoying financial autonomy and accountability shall have to elaborate their internal spending rules as a basis for their cadres and employees to comply with and for the state treasury to control spending (the contents of internal spending rules are guided in Appendix 01 to this Circular (not printed herein)).

2. Principles, contents and scope of elaboration of internal spending rules:

a/ Internal spending rules shall be promulgated by the heads of non-business units after they are widely discussed in a democratic and public manner within the units and agreed upon by the units' trade unions.

b/ Internal spending rules shall be sent to the managing agencies and finance offices of the same level for motoring and supervision of compliance therewith; sent to the State Treasury where the units open transaction accounts for use as a basis for spending control. In case there are rules incompliant with state regulations, within 15 days after receiving the report, the managing unit shall request the unit concerned to adjust such rules and, at the same time, send them to the finance office of the same level and the State Treasury where the unit opens its transaction accounts.

c/ Internal spending rules of a unit shall include regulations on spending regimes, criteria, norms and levels for uniform application within the unit, ensuring the fulfillment of its assigned tasks and suitability with the characteristics of its activities, thrifty and efficient use of funds and enhanced management.

d/ For spending items falling within the scope of internal spending rules (regular management and professional operation expenses) but subject to regime, criteria and norms prescribed by competent state agencies (excluding some criteria, norms and spending items specified at Item f of this Clause), the heads of non-business units shall be allowed to:

- Decide on management and professional operation expense levels higher or lower than those prescribed by competent state agencies, for non-business units self-assuring or partially self-assuring operation expenses.

- Decide on spending levels not higher than those prescribed by competent state agencies, for non-business units with all operation expenses covered with the state budget.

e/ For spending items and levels necessary for the units' activities and within the scope of internal spending rules but not yet prescribed by competent state agencies, the heads of the units may set the spending levels for each task or job within the limit of the units' financial sources.

f/ For the following spending criteria, norms and levels, non-business units shall have to strictly comply with state regulations:

- Criteria for and norms on the use of cars;

- Criteria for and norms on working offices;

- Criteria for and norms on the equipping of official-duty telephones at private homes and cellular phones;

- Regime of overseas working trip allowances;

- Regime of reception of foreign guests and international seminars in Vietnam;

- Regime of management and use of funds of national target programs;

- Regime of use of funds reserved for unexpected tasks assigned by competent authorities;

- Regime and policies for personnel streamlining (if any);

- Regime of management and use of contributed domestic capital of projects and donated capital belonging to state budget capital;

- Regime of management and use of capital construction investment capital, funds for procurement and major repair of fixed assets for use for non-business activities under projects approved by competent authorities.

Particularly, funds for performance of state-level, ministerial-level and branch-level scientific and technological tasks shall comply with the guidance of the Ministry of Finance and Ministry of Science and Technology.

g/ The heads of the units shall base themselves on the previous year's work characteristics, spent funds and performance results to decide on the mode of assigning package funds to each individual, section and attached dependent-accounting unit for use, such as stationery, telephone, petrol, electricity, water and working trip allowances; amounts saved from the assignment of package funds shall be treated as revenue-expenditure differences and be distributed and used according to regulations.

h/ In implementing internal spending rules, the units shall have to ensure lawful and valid documents and invoices according to regulations, except for the payment of stationery costs and working trip allowances which shall comply with the package regime according to internal spending rules and the payment of monthly charges for official-duty telephones at private homes and for cellular phones which shall comply with the guidance in the Finance Ministry's Circular No. 29/2003/TT-BTC of April 14, 2003;

i/ Non-business units shall not use their funds for procuring equipment, furniture and property for equipping private homes or for lending in any forms (except for official-duty phones at private homes according to regulations).

VIII. Regarding financial autonomy and accountability for units self-assuring or partially self-assuring operation expenses under Section 2 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Regarding financial sources defined in Article 14 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1.1. Funds allocated from the state budget, including:

a/ Fund for assuring routine activities of performing functions and tasks of non-business units partially self-assuring operation expenses (after being balanced against non-business revenues); directly allocated by managing units and within the limit of budget estimates assigned by competent authorities;

b/ Fund for performing scientific and technological tasks (for units other than scientific and technological organizations);

c/ Fund for implementing cadres' and employees' training programs;

d/ Fund for implementing national target programs;

e/ Fund for performing tasks ordered by a competent state agency (investigation, planning, survey and other tasks);

f/ Fund for performing unexpected tasks assigned by competent authorities;

g/ Fund for implementing personnel streamlining policies according to state regulations (if any);

h/ Capital construction investment capital; fund for procurement of equipment and overhaul of fixed assets used in non-business activities under projects approved by competent authorities within the limit of assigned annual budget estimates;

i/ Domestic contributed capital for carrying out projects involving foreign capital sources approved by competent authorities;

j/ Other funds (if any).

1.2. Non-business revenue sources, including:

a/ Portions of collected charge and fees amounts, which are retained and used by the units according to state regulations;

b/ Revenues from service activities suitable to the units' professional domains and capabilities, specifically:

- Non-business education and training: revenues from training contracts with domestic and foreign organizations; revenues from the production and sale of products for practicing and experiments; revenues from scientific and technological service contracts and other revenues according to the provisions of law.

- Non-business health and social assurance: Revenues from the provision of services on medical examination and treatment, functional rehabilitation, preventive medicine, training and scientific research with other organizations; supply of blood products, vaccines and biologicals; revenues from the provisions of related services (laundering, food and drink catering, transportation of patients, others); revenues from the provision of services on preparation of drugs, transfusion fluids, blood screening and other revenues according to the provisions of law.

- Non-business culture and information: Revenues from the sale of performance and film tickets, performance contracts with domestic and foreign individuals and organizations; the provision of services on film duplication, dubbing and restoration; revenues from advertisements printed or broadcast on newspapers, magazines, publications, radio and television; revenues from press distribution, agitation information and other revenues according to the provisions of law.

- Non-business physical training and sports: revenues from services on stadiums and playing fields, advertisement, radio and television copyright and other revenues according to the provisions of law.

- Non-business economic activities: Revenues from consultancy, designing and planning work, services on agriculture, forestry, irrigation, aquaculture, transport, industry, construction, land administration, geology and other branches; other revenues according to the provisions of law.

c/ Other revenues (if any).

d/ Profits shared from joint-venture and associated activities, interests from bank deposits which are earned from service activities.

1.3. Donated capital, presents and gifts according to the provisions of law.

1.4. Other sources, including:

a/ Loans borrowed from credit institutions and capital mobilized from cadres and employees within the units.

b/ Capital contributed by domestic and foreign individuals and organizations to joint-venture and associated activities.

2. Regarding spending items defined in Article 15 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

2.1. Regular expenses:

a/ Expenses for routine activities according to functions and tasks assigned by competent authorities, including salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations; public services; stationery; professional operation expenses; expenses for regular repair of fixed assets and other expenses according to regulations.

b/ Expenses for routine activities in service of the collection of charges and fees, including: salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations for laborers directly engaged in the collection of charges and fees; professional operation expenses; expenses for regular repair of fixed assets and other expenses according to regulations.

c/ Expenses for service activities, including salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations; raw materials, fuel, supplies and labor outsourced; depreciation of fixed assets; expenses for repair of fixed assets; interests paid on loans and capital mobilized in the form of borrowing from cadres and employees; taxes paid according to the provisions of law and other expenses (if any).

2.2. Irregular expenses, including expenses defined in Clause 2, Article 15 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006.

3. Regarding salaries, remuneration and increased incomes defined in Article 18 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

3.1. Salaries and remuneration:

a/ For activities of performing functions and tasks assigned by the State; activities of collecting charges and fees, salaries and remuneration shall be paid by the units to laborers according to grades and positions prescribed by the State.

b/ For activities of providing services under orders placed by the State for which salary units are included in product unit prices approved by competent agencies, salaries and remuneration shall be paid by the units to laborers according to such unit prices.

For products made under orders placed by the State for which salary units are not yet included in product unit prices, salaries and remuneration shall be paid by the units to laborers according to levels and positions prescribed by the State.

c/ Where the units have set up dependent non-business organizations to carry out service activities and organized separate accounting of turnovers and expenses for each service; for salaries and remuneration of laborers engaged in carrying out such services, the units may apply the salary regime applied to state enterprises specified in the Government's Decree No. 205/2004/ND-CP of December 14, 2004, stipulating the system of salary scales and tables and the salary allowance regime applied to state companies and Decree No. 206/2004/ND-CP of December 14, 2004, stipulating the management of labor, salaries and incomes in state companies.

For service activities for which the units have set up dependent non-business organizations and organized separate accounting of turnovers and expenses for each service, salaries and remuneration of laborers engaged in carrying out such services shall be calculated by the units according to rank- and position-based salaries prescribed by the State.

3.2. Increased incomes:

a/ The State encourages non-business units to increase revenues and cut expenses, streamline personnel and increase incomes for laborers while still fulfilling their assigned tasks and their obligations toward the state budget; on the basis of each year's financial results; the units shall decide on the total amount of increased income in the year as follows:

- For non-business units self-assuring operation expenses, they shall be allowed to decide on the total increased income amount in the year according to their internal spending rules after making deductions for the non-business activity development fund under the provisions of Clause 4, Section VIII of this Circular.

- For non-business units partially self-assuring operation expenses, they shall be allowed to decide on the total increased income amount in the year which, however, shall not exceed two times the year's rank- and position-based salary fund prescribed by the State after making deductions for the non-business activity development fund under the provisions of Clause 4, Section VIII of this Circular.

The rank- and position-based salary fund used as the basis for calculating the total increased income amount of a unit shall comprise:

- Rank-based salaries and position-based allowances and extra-seniority allowances (if any): to be calculated on the basis of the salary co-efficient and position-based or extra-seniority allowance (if any) coefficient of laborers in the unit (laborers on the payroll and laborers working under contracts with a one-year or longer term) and the general minimum salary level stipulated by the Government.

- Laborers' increased salaries thanks to salary rise according to schedule or ahead of schedule (if any).

The above said annual rank-based and position-based salary fund of a unit shall not cover remuneration paid under piecework contracts.

b/ Payment of increased income to each laborer in the units (laborers on the payroll and laborers working under contracts with a one-year or longer term) shall comply with the unit's internal spending rules and ensure the principle that a person working with higher efficiency and making greater contributions to the revenue increase and cost reduction shall get a higher pay.

3.3. When the State adjusts salary regulations and increases the minimum salary level; the increased rank- and position based salary amounts according to state regulations shall be assured by the units themselves from their non-business revenues and other amounts stipulated by the Government.

In case the above-said revenue sources are not enough for assuring increased rank- and position-based salary amounts according to state regulations, the deficit shall be considered and supplemented from the state budget to ensure the general salary regime as stipulated by the Government.

4. Regarding the use of financial results in a year defined in Article 19 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

Annually, after paying all expenses, taxes and other remittable amounts according to regulations, the positive difference between revenues and expenditures (revenues and expenditures related to routine activities and tasks ordered by the State) shall be used by the units in the following order:

- At least 25% of the positive revenue-expenditure difference shall be deducted to set up the non-business activity development fund;

- Paying increased incomes to laborers under the guidance at Point 3.2, Clause 3, Section VIII of this Circular.

- Making deductions to set up the reward fund, the welfare fund and the income stabilization reserve fund. For the reward and welfare funds, the maximum deduction shall not exceed the average of three months' salaries, remuneration and increased income in the year.

In case the positive revenue-expenditure difference is just equal to or smaller than the annual rank- and position-based salary fund of a unit, the unit may decide to use it as follows:

- Paying increased incomes to laborers;

- Making deductions to set up the non-business activity development fund (the minimum deduction level of 25% of the positive revenue-expenditure difference is not compulsory), the reward fund, the welfare fund and the income stabilization reserve fund. For the reward and welfare funds, the maximum deduction shall not exceed the average of three months' salaries, remuneration and increased income in the year.

On the basis of the above provisions, the heads of the units shall decide on specific increased incomes and deductions to set up funds according to the units' internal spending rules.

The spending items of the reward fund and welfare fund set up under the above provisions shall also include rewards and welfare benefits for the collection of charges and fees (for units assigned the task of collecting charges and fees).

5. Use of funds shall comply with the provisions of Article 20 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006.

6. Temporary advance payment of increased incomes: On the basis of the non-business units' financial results of each quarter or year, in order to encourage in time laborers to strive to fulfill their assigned tasks, the heads of the units may temporarily pay in advance increased incomes to laborers within their units. The level of temporary advance payment of increased incomes in a quarter shall not exceed 40% of the positive revenue-expenditure difference determined in such quarter.

After their annual financial settlements are approved by competent authorities and the positive revenue-expenditure difference is precisely determined, the heads of the units shall make further payment of increased incomes as prescribed to laborers according to the units' internal spending rules. In case the temporarily paid amount exceeds the positive revenue-expenditure difference reserved for payment of increased incomes according to the unit's internal spending rules, the excessively paid amount shall be subtracted from the subsequent year's amount for payment of increased incomes.

7. Non-business units shall not use funding sources specified in Clause 2, Article 19 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, for paying increased incomes to laborers and setting up various funds.

IX. Regarding financial autonomy and accountability of non-business units with all operation expenses assured with the state budget defined in Section 3 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

1. Financial sources, defined in Article 21 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, are guided as follows:

a/ Fund for assuring routine activities of performing functions and tasks directly allocated by managing units and within the limit of budget estimates assigned by competent authorities;

b/ Fund for performing scientific and technological tasks (for units other than scientific and technological organizations);

c/ Fund for implementing cadres' and employees' training programs;

d/ Fund for implementing national target programs;

e/ Fund for performing unexpected tasks assigned by competent authorities;

f/ Fund for implementing personnel streamlining policies according to state regulations (if any);

g/ Capital construction investment capital; fund for procurement of equipment and overhaul of fixed assets used in non-business activities under projects approved by competent authorities within the limit of assigned annual budget estimates;

h/ Domestic contributed capital for carrying out projects involving foreign capital sources approved by competent authorities;

i/ Other funds (if any).

1.2. Non-business revenue sources (if any), including:

a/ Portions of collected charge and fee amounts, which are retained and used by the units according to state regulations;

b/ Revenues from service activities suitable to the units' professional domains and capabilities, as guided at Item b, Point 1.2, Clause 1, Section VIII of this Circular;

c/ Other revenues (if any).

1.3. Donated capital, presents and gifts according to the provisions of law.

1.4. Other sources as provided for by law (if any).

2. Regarding spending items defined in Article 22 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

2.1. Regular expenses:

a/ Expenses for routine activities according to functions and tasks assigned by competent authorities, including salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations; public services; stationery; professional operation expenses; expenses for regular repair of fixed assets and other expenses according to regulations.

b/ Expenses for routine activities in service of the collection of charges and fees, including: salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations for laborers directly engaged in the collection of charges and fees; professional operation expenses; expenses for regular repair of fixed assets and other expenses according to regulations for the collection of charges and fees.

c/ Expenses for service activities (if any), including salaries; remuneration; salary allowances; social insurance and health insurance contributions; trade union funds according to current regulations; raw materials, fuel, supplies and labor outsourced; depreciation of fixed assets; expenses for repair of fixed assets and other expenses according to regulations.

2.2. Irregular expenses, including expenses defined in Clause 2, Article 22 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006.

3. Regarding salaries, remuneration and increased incomes defined in Article 25 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

3.1. Salaries and remuneration:

a/ For activities of performing functions and tasks assigned by the State; activities of collecting charges and fees, salaries and remuneration shall be paid by the units to laborers according to rank- and position-based salaries prescribed by the State.

b/ For service activities (if any), salaries and remuneration shall be paid by the units to laborers engaged in these activities according to rank- and position based salaries prescribed by the State.

3.2. Increased incomes:

a/ The State encourages non-business units to increase revenues and cut expenses, streamline personnel and increase incomes for laborers while still fulfilling their assigned tasks and their obligations toward the state budget; on the basis of each year's financial results; the units shall decide on the total amount of income increased in the year for their laborers, which however shall not exceed the year's rank- and position-based salary fund prescribed by the State.

The rank- and position-based salary fund used as a basis for calculating the total increased income amount shall be determined by the units under the guidance at Item a, Point 3.2, Clause 3, Section VIII of this Circular.

b/ Payment of increased income to each laborer (laborers on the payroll and laborers working under contracts with a term of one year or more) shall comply with the units' internal spending rules and ensure the principle that a person working with higher efficiency and making greater contributions to revenue increase and cost reduction shall get a higher pay.

3.3. When the State adjusts salary regulations and increases the minimum salary level; the increased rank- and position based salary amounts according to state regulations shall be assured with sources stipulated by the Government.

4. Regarding the use of saved funds (positive revenue-expenditure difference) defined in Article 26 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006:

Annually, after paying all expenses, taxes and other remittable amounts according to regulations, the positive revenue-expenditure differences from service activities (if any) shall be used by the units in the following order:

- Paying increased incomes to laborers under the guidance at Point 3.2, Clause 3, Section IX of this Circular.

- Paying regular and irregular rewards to collectives and individuals within and outside the units according to their performance and contributions to the units' activities;

- Paying welfare benefits, difficulty allowances, irregular allowances to laborers, including those who have retired at retirement age or because of poor health; additional payments to payrolled laborers who are streamlined;

- Paying expenses for improving the unit's material foundations;

- In case a unit deems that the saved fund is unstable, it may set up an income stabilization reserve fund to ensure laborers' incomes.

On the basis of the above provisions, the heads of the units shall decide on specific payments and deductions to set up the income stabilization reserve fund according to the units' internal spending rules.

The spending items on rewards and welfare benefits under the above provisions shall also include rewards and welfare benefits for the collection of charges and fees (for units assigned the task of collecting charges and fees).

5. Temporary advance payment of increased incomes: On the basis of the non-business units' financial results of each quarter or year, in order to encourage in time laborers to strive to fulfill their assigned tasks, on the basis of the possible saved funds, the heads of the units may temporarily pay in advance increased incomes to laborers within their units. The level of temporary advance payment of increased incomes in a quarter shall not exceed 50% of the unit's possible saved fund in such quarter.

After their annual financial settlements are approved by competent authorities and the positive revenue-expenditure difference is precisely determined, the heads of the units shall make further payment of increased incomes as prescribed to laborers according to the units' internal spending rules. In case the temporarily paid amount exceeds the positive revenue-expenditure difference reserved for payment of increased incomes according to the unit's internal spending rules, the excessively paid amount shall be subtracted from the subsequent year's amount for payment of increased incomes.

6. Non-business units shall not use funding sources specified in Clause 2, Article 26 of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, for paying increased incomes to laborers and setting up various funds.

X. Making of budget estimates, observance of budget estimates, cost-accounting and settlement of revenues and expenditures:

The making of budget estimates, observance of budget estimates, cost-accounting and settlement of state budget revenues and expenditures in non-business units shall comply with the provisions of the State Budget Law, the Accounting Law, guiding documents and this Circular.

1. Making of budget estimates:

1.1. Making of budget estimates of non-business units:

a/ Making of budget estimates for the first year of the stabilization period of classification of non-business units:

On the basis of the functions and tasks assigned by competent authorities, the tasks of the plan year, current financial expenditure regimes, results of non-business activities and the preceding year's status of financial revenues and expenditures (with the exclusion of unexpected and irregular elements), the units shall make revenue and expenditure estimates for the plan year; determine the category of non-business units under the provisions of Section II of this Circular, the proposed amount to be assured with the state budget for routine activities (for non-business units partially self-assuring operation expenses and non-business units with all operation expenses assured with the state budget); specifically:

- Estimates of regular revenues and expenditures:

+ Revenue estimate:

For collectible charges and fees: On the basis of payees, charge and fee levels and the percentage of collected amounts to be retained for spending according to regulations of competent state agencies.

For non-business revenues: On the basis of service plans and charge levels decided by the units or stated in economic contracts already signed by the units.

+ Expenditure estimate: The units shall make detailed estimates for each task, such as regular expenses for the performance of functions and tasks assigned by the State; expenses for the collection of charges and fees; expenses for service activities according to current regulations and the provisions of this Circular.

- Estimates of irregular expenses shall be made by the units for each spending task according to current regulations of the State.

Revenue and expenditure estimates of the units shall be enclosed with detailed explanations on calculation bases for each revenue or expenditure item and be sent to direct managing agencies for consideration and synthesis and forwarding to managing ministries or branches (for central non-business units) or to local managing agencies (for local non-business units) according to current regulations.

b/ Making of budget estimates for two subsequent years of the stabilization period:

- For revenue and expenditure estimates for routine activities: On the basis of state regulations, non-business units shall make revenue and expenditure estimates for routine activities of the plan year, in which the fund to be assured with the state budget for routine activities (for non-business units partially self-assuring operation expenses and non-business units with all operation expenses assured with the state budget) shall be the preceding year's fund assured with the state budget for routine activities added (+) or subtracted (-) by the fund for increased or reduced tasks of the plan year as decided by a competent state agency.

- Estimates of irregular expenses shall be made by the units for each spending task according to current state regulations.

Revenue and expenditure estimates of non-business units shall be sent to their direct managing agencies for consideration and synthesis and forwarding to their managing ministries or branches (for central non-business units) or to their local managing agencies (for local non-business units) according to current regulations.

1.2. Making of budget estimates of managing agencies:

a/ Making of budget estimates for the first year of the stabilization period:

On the basis of revenue and expenditure estimates for the first year of the stabilization period made by the units, the managing agencies shall classify non-business units under the provisions in Section II of this Circular and the funds to be assured with the state budget for the units' routine and non-routine activities, then synthesize them and send reports thereon to the finance agencies of the same level and concerned agencies according to current regulations.

The classification of non-business units and the determination of funds to be assured with the state budget for routine activities for the first year of the stabilization period (for non-business units partially self-assuring operation expenses and non-business units with all operation expenses assured with the state budget) shall comply with the guidance in Clause 1, Section XI of this Circular.

b/ Making of estimates for two subsequent years of the stabilization period:

Annually, during the period of stabilized classification of non-business units, managing ministries (for central non-business units) or managing agencies (for local non-business units) shall base themselves on non-business units' revenue and expenditure estimates to consider and synthesize them into state budget estimates and send them to the finance agencies of the same level.

2. Assignment of state budget revenue and expenditure estimates:

2.1. Assignment of budget estimates for the first year of the stabilization period:

On the basis of the state budget revenue and expenditure estimates assigned by competent authorities, managing ministries (for central non-business units) or managing agencies (for local non-business units) shall draw up allocation plans and send them to the finance agencies of the same level for verification; after obtaining the agreement of the finance agencies of the same level, the managing agencies shall assign budget estimates to the units for implementation:

a/ Revenue and expenditure estimates for routine activities:

- Assignment of revenue estimates:

+ Total charge and fee amount to be collected.

+ Charge and fee amount to be retained by the unit for use according to regulations of competent state agencies on each type of charge or fee.

+ Charge and fee amount to be remitted into the state budget.

- Assignment of expenditure estimates:

+ Assignment of expenditure estimates with respect to the charge and fee amount retained by the unit for use according to regulations of competent state agencies on each type of charge or fee.

+ Assignment of expenditure estimates with respect to the allocated state budget fund: On the basis of the approved estimate of the state budget fund for assuring routine activities in the first year of the stabilization period (for non-business units partially self-assuring operation expenses and non-business units with all operation expenses assured with the state budget), managing agencies shall assign expenditure estimates for routine activities to the units within the limit of the state budget expenditure estimate assigned by competent authorities. Regular expenditure estimates shall be assigned and allocated into the "Other expenses" category in the state budget index.

For service activities, managing agencies shall not assign revenue and expenditure estimates, which shall be made by non-business units for administration in the year.

b/ For irregular expenditure estimates, managing agencies shall assign estimates to the units according to current regulations.

Irregular expenditure estimates shall be assigned and allocated into four expenditure categories in the state budget index according to current regulations.

2.2. Assignment of budget estimates for two subsequent years of the stabilization period:

a/ For revenue and expenditure estimates for routine activities:

Annually, during the period of stabilized classification of non-business units, managing agencies shall decide to assign revenue and expenditure estimates to non-business units according to current regulations.

Estimates of regular expenditures to be assured with the state budget (for non-business units partially self-assuring operation expenses and non-business units with all operation expenses assured with the state budget) shall include the preceding year's fund and the increased fund (including fund for increased tasks) or shall be reduced as decided by competent authorities within the limit of state budget revenue and expenditure estimates assigned by competent authorities after obtaining the written agreement of the finance agencies.

b/ For irregular expenditure estimates, managing agencies shall assign estimates to the units according to current regulations.

2.3. Realization of revenue and expenditure estimates:

For regular expenditure estimates assigned by competent authorities, non-business units may adjust spending items as appropriate to their practical situation and send reports thereon to their managing agencies and State Treasury where they open transaction accounts for monitoring, management, payment and settlement. At the end of the budget year, estimated expenditures for routine activities and non-business revenues which have not yet been spent up shall be carried forward to the subsequent year for further spending.

For irregular expenses, the adjustment of spending items and categories and funds not yet used or spent up by year-end shall comply with the provisions of the State Budget Law and guiding documents promulgated by the Ministry of Finance.

2.4. Cost-accounting: Non-business units shall account their revenues and expenditures into revenue and expenditure accounts in the state budget index according to current regulations. In addition, some expenses are specifically guided as follows:

- For non-business units self-assuring or partially self-assuring operation expenses: Payments of increased incomes to laborers shall be accounted into Section 108 "Payments to individuals", sub-section 03; deductions for setting up funds, accounted into Section 134 "Other expenses" and the relevant sub-section.

- For non-business units with all operation expenses assured with the state budget: Payments of increased incomes to laborers shall be accounted into Section 108 "Payments to individuals"; expenses on rewards, accounted into Section 104 "Reward money"; expenses on welfare benefits and additional allowances other than general entitlements for persons who voluntarily retire from working in the process of workforce reorganization, accounted into Section 105 "Collective welfare"; deductions for setting up the income stabilization reserve fund, accounted into Section 134 "Other expenses" and sub-section 16 according to the provisions of the state budget index.

2.5. Settlement:

Non-business units shall make quarterly accounting reports and annual settlement reports and send them to managing agencies according to current regulations.

2.6. Supervision and control of revenues and expenditures:

a/ State treasuries at all levels:

- To control expenditures under the provisions in the circular guiding the control of expenditures at non-business units enjoying autonomy and accountability for performing their tasks and for their organizational apparatus, payroll and finance and the guidance in this Circular;

- In case a non-business unit does not yet acquire a decision of a competent agency on assigning financial autonomy and accountability to it or does not yet send its internal spending rules to the state treasury where it opens transaction accounts, the state treasury shall control its expenditures according to current expenditure regimes promulgated by competent agencies;

- At year-end, at the request of the units, the state treasuries where transactions are conducted shall transfer the balances of the fund for regular expenditures and of non-business revenues to the subsequent year for continued spending. Particularly for the balances of the funds for regular expenditures, after transferring them, the state treasuries shall sum them up for each grade-I estimate-making unit and send reports thereon to the finance agency of the same level within 45 days after the expiry of the duration for adjustment of settlements of each budget level. The finance agencies shall base themselves on such reports of the state treasuries to consider and fill in procedures for carrying forward such balances to the subsequent year.

b/ In the course of practicing financial autonomy and accountability, non-business units shall have to conduct self-supervision within their units;

c/ Managing agencies and concerned state agencies shall supervise and inspect revenues and expenditures made by non-business units according to current regulations and the provisions of this Circular.

XI. Organization of implementation

1. Classification of non-business units and determination of state budget funds for assuring routine activities in the first year of the stabilization period:

a/ For central non-business units:

- On the basis of the functions and tasks assigned by competent agencies and the guidance in this Circular, the units shall make plans on financial autonomy and accountability and send them to their managing agencies (made according to a set form);

- Managing ministries shall consider and verify the units' revenue and expenditure estimates and proposed state budget funds for assuring routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget), then sum up and send them to the Ministry of Finance.

The Ministry of Finance shall consider and give written opinions on the classification of non-business units and proposed state budget funds for assuring routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget).

- After obtaining the agreement of the Ministry of Finance, managing ministries shall issue decisions to assign financial autonomy and accountability to each non-business unit, which state the category of the non-business unit concerned and the fund for assuring its routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget).

b/ For local non-business units:

- On the basis of the functions and tasks assigned by competent agencies and the guidance in this Circular, the units shall make plans on financial autonomy and accountability and send them to their managing agencies (made according to a set form);

- Local managing agencies shall consider and verify the units' revenue and expenditure estimates and proposed state budget funds for assuring routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget), then sum up and send them to the finance agencies of the same level.

- The finance agencies shall consider and give written opinions on the classification of non-business units and proposed state budget funds for assuring routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget).

- After obtaining the opinions of the finance agencies of the same level, local managing agencies shall submit them to the People's Committees of relevant levels (or authorized agencies) for the latter to issue decisions to assign financial autonomy and accountability to each non-business unit, which state the category of the non-business unit concerned and the fund for assuring its routine activities (for units partially self-assuring operation expenses and units with all operation expenses assured with the state budget).

2. At the last year of the stabilization period, non-business units shall make review reports on the implementation of the financial autonomy and accountability mechanism over the past three years. On the basis of the implementation results of the preceding period and the tasks of the plan year and the subsequent period, non-business units shall make plans on financial autonomy and accountability for the subsequent stabilization period and send them to managing agencies for consideration at the same time with making state budget estimates for the plan year.

The order of consideration, classification and assignment of financial autonomy and accountability to non-business units shall comply with the provisions of Clause 1, Section XI of this Circular.

3. Non-business units which enjoyed autonomy under the Government's Decree No. 10/2002/ND-CP of January 16, 2002, on the financial regime applicable to revenue-generating non-business units shall switch to apply the provisions of the Government's Decree No. 43/2006/ND-CP of April 25, 2006, stipulating public non-business units' autonomy and accountability for their task performance, organizational apparatus, payroll and finance from the effective date of Decree No. 43/2006/ND-CP in 2006; the year 2007 shall be the first year for these units to enjoy autonomy and accountability under the Government's Decree No. 43/2006/ND-CP of April 25, 2006, for the stabilization period of 2007-2009.

4. For revenue-generating non-business units which have not yet enjoyed financial autonomy and accountability under the Government's Decree No. 10/2002/ND-CP of January 16, 2002, the year 2007 shall be the first year for these units to enjoy autonomy and accountability under the Government's Decree No. 43/2006/ND-CP of April 25, 2006, for the stabilization period of 2007-2009.

In case a unit makes a request and is eligible for applying the Government's Decree No. 43/2006/ND-CP of April 25, 2006, it shall practice autonomy and accountability under the Government's Decree No. 43/2006/ND-CP of April 25, 2006, from the effective date of Decree No. 43/2006/ND-CP in 2006.

5. Annual reporting regime:

- Non-business units practicing financial autonomy and accountability shall annually report to their managing agencies on the results of practicing financial autonomy and accountability before January 31 of the subsequent year.

- Ministries, ministerial-level agencies, government-attached agencies and People's Committees of provinces and centrally run cities shall review the implementation of the financial autonomy and accountability mechanism and send review reports to the Ministry of Finance before February 25 of the subsequent year.

6. This Circular shall take effect 15 days after its publication in "CONG BAO."

In the course of implementation, any arising difficulties and problems should be reported to the Ministry of Finance for timely settlement.